How Susan Collins, the GOP could influence Obamacare

Sen. Susan Collins with President Barack Obama in the Oval Office in this March 2013 file photo.

October 7, 2013 2:58 pmUpdated: October 7, 2013 2:59 pm

On Saturday, Maine Sen. Susan Collins laid out what she described as a three-part compromise to end the federal government shutdown and start making the federal Affordable Care Act more workable.

She proposed repealing a 2.3 percent, manufacturer-paid tax on medical devices that’s included in the federal health care law; passing a resolution to restart funding for federal agencies; and allowing those agencies flexibility to implement $85 billion in sequestration cuts more strategically.

It seems increasingly likely that a deal to restart government funding will be connected to changes to the Affordable Care Act, and that’s disappointing.

But in that context, Collins’ bargain is a welcome effort to restart federal government operations. Finally, it’s a proposal from a Republican to adjust, rather than entirely undermine, the Affordable Care Act and reopen government.

We’re not fond of the focus on repealing the medical device tax. The tax is designed to raise $30 billion over a decade to help pay for subsidies that will make health insurance more affordable for the uninsured. And while the industry claims the levy will cost medical device manufacturers 6 percent of their annual revenue and force them to slash 43,000 U.S. jobs, a Bloomberg Government analysis found those numbers were based on flawed assumptions.

But if the repeal or delay of that tax is the key to reopening government and avoiding a default on the country’s debt obligations, Democrats should negotiate over it.

First, the medical device tax repeal is a change that can garner bipartisan support. Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, has said its potential repeal is on the negotiating table, and Democratic legislators from states that are home to medical device manufacturers are against the tax. In July, 79 senators — including 30 Democrats — favored a symbolic resolution calling for the tax’s repeal.

Second, Collins suggested a measure to offset the $30 billion, 10-year revenue loss that could help businesses struggling under the weight of pension plan obligations: allowing private businesses to postpone, or “smooth out,” tax-deductible pension payments. The federal government would collect additional revenue in the years when businesses postpone pension payments and claim fewer pension-related tax deductions as a result. Democrats have said they won’t entertain a proposal to repeal the tax unless the government can make up for the lost revenue.

While we disagree that the medical device tax is one of Obamacare’s problems, the GOP is right that Obamacare isn’t perfect.

If they sincerely want to reopen government and improve the law, Republicans should agree to a resolution to resume government funding, then open a serious conversation about the health law by recommending legitimate reforms.

One reform is a change the GOP has long pushed: medical malpractice reform.

Republicans have criticized Obamacare because it included no such reforms to address staggering malpractice insurance costs doctors must pay and pass on or the added costs incurred by doctors when they practice “defensive medicine” — ordering that extra test, procedure or hospital readmission because the precaution could protect them from lawsuits.

Obama’s own former budget chief, Peter Orszag, laid out a path for medical malpractice reform earlier this year in a Bloomberg View column. If Republicans genuinely want to exert some influence over Obamacare, this is a place where they could start.

Collins and others in the GOP should also suggest rewriting a portion of the health law that currently makes those earning less than 100 percent of the federal poverty level — about $11,500 for a single person — ineligible for subsidies that could make private insurance available through the law’s online exchanges more affordable.

As the law was originally written — when states were forced to expand Medicaid to all those earning 138 percent of the poverty level and less — that provision didn’t matter. Now it does, since the Supreme Court made Medicaid expansion optional. In states like Maine that aren’t expanding Medicaid, those without coverage earning less than the poverty level are left without affordable insurance options.

Republicans should be interested in fixing this because making insurance more affordable for the poorest would expand the universe of people who could buy private health insurance.